When you hear the phrase “IRS tax audit,” you may immediately feel a surge of apprehension. After all, who really wants to be confronted by the Tax Man? Fortunately, you can keep Mr. Tax Man away by taking a few crucial steps each year, based on audit defense reviews.
First, it is a wise move to constantly check your numerical figures when you file your taxes. The unfortunately reality is that many taxpayers are careless during tax filing season. For example, they may include the wrong data on their forms. Or, they may be so eager to file that they do so before they’ve gotten all of their investment/bank statements and income reports in. Be sure to gather all of your documents before starting the filing process, and triple-check to make sure that your data entry is accurate every time.
As a general rule of thumb, those whose income is in the middle range have a lower chance of being audited as well. Why? Because the IRS pays more attention to wealthy taxpayers, who tend to take a greater number of deductions and make more charitable contributions than middle-income earners do. Likewise, the IRS tends to focus more on those in the lower tax brackets, as they often pursue the earned income tax credit, which has a high level of fraud associated with it.
Finally, try to file your taxes online each year. Research shows that filing a return electronically can drastically reduce your errors and therefore decrease your chances of being audited. Specifically, according to the IRS, the rate of errors with electronically filed returns is ½% versus 21% for paper returns. All in all, being patient, detail oriented, and careful at tax-filing time can save you the grief of an IRS tax audit in the years ahead.